White-collar recidivism at Wells Fargo

It’s neither unfair nor unreasonable at this point to wonder if these folks’ ethical learning curve has flat-out flatlined.

It hasn’t been a year since San Francisco-based banking giant Wells Fargo, whose brand is not only fabled in American lore but long respected worldwide for business integrity, besmirched itself with a bogus accounts scam. Under high-level pressure to meet aggressive sales goals, employees created some 2 million accounts in the names of customers who had no idea these accounts even existed. It cost Wells Fargo $180 million in fines, and another $140 million-plus in a class-action settlement with customers.

That was then.

Now the bank has admitted that it sold automobile insurance to more than a half-million auto loan borrowers it knew were already insured. According to an Associated Press report, as many as 25,000 of these borrowers may have lost their cars when they were unable to afford both the car and the needless insurance payments.

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A statement from the head of Wells Fargo Consumer Lending said bank officials “take full responsibility for our failure … and are extremely sorry for any harm this caused our customers,” etc.

“Failure” … what a gently non-self-judgmental and no doubt well-lawyered word.

Wells Fargo, like almost all auto lenders, requires borrowers to have insurance. No problem, no foul. If they don’t have it, the bank buys it for the customer and adds it to the bill. Again, no problem.

But it seems that over the last five years, the bank signed up customers for something called collateral production insurance that many did not know had been added to their debt.

The people who lost their cars might just be the surface problem. The New York Times reports that as many as 800,000 borrowers might have been directly or indirectly affected, more than a quarter-million of whom might have fallen into default.

Wells Fargo now says it will pay approximately $80 million in refunds and account adjustments, and will begin contacting affected customers this month to make financial amends and correct their credit ratings.

Good start, but then what?

Just as with the scandal of 2016, the question of accountability hangs over this latest big-money scam. Sales to unsuspecting borrowers of insurance they didn’t need and in many cases obviously couldn’t afford weren’t accidental oversights. They were conscious decisions by bank employees and officials who knew exactly what they were doing and what the consequences could, and for many customers almost certainly would be.

No doubt people (again) will be fired, and no doubt Wells Fargo (again) will be penalized, and authorities will (again) hold news conferences sternly announcing harsh, perhaps “record” fines and forfeitures for this unconscionable conduct. And (again) nobody will face criminal charges, and there will be no seriously daunting disincentive — like, say, prison — for unscrupulous people with access to lots of unsuspecting people’s money to do the same kinds of things. Again.